You're assuming that there absolutely has to be a cheaper alternative. I'm not sure what you base that assumption on.
I base that assumption on the assumption (perhaps incorrect in this case) that the government of Forboldn WANTS new settlers. One does not encourage settlers by placing barriers to entry. Instead, one lowers the barriers to entry so as to make homesteading seem like a good idea to people who would otherwise just go on with their lives, or go somewhere else.
And the colony organizers didn't tell them any such thing. They told them that once the colony had been established and survived for a few years, they would all lease land to latecomers and become rich on the rents and from the sale of city plots.
So, the organizers lied to them? Okay, I can buy that.
Note that noone is going to get rich doing that when you're paying large sums up front for the real estate. Especially since the people building the hypothetical city can just buy their own land from the government without wasting time buying your land.
So if the government did have a way to enforce the claim, your objection would be answered?
My objection to having to buy the land would be answered. I'd still have the attitude that I'd rather settle somewhere that wanted settlers enough to provide unused land for free...
Well, there's your reason to buy instead of just homesteading. These colonists wanted more than 16 hectares each. They want to be landowners on a grand scale. And if the government does have a way to enforce its claim, it also has a way to protect the property rights that the settlers bought off it.
They're going to be landowners on a "grand scale" while having to spend millions just to get what amounts to a bare minimum homestead? How is that going to work? Remember, they have to prove the claim - which means putting to use every hectare they buy (or the government can reclaim it).
The only way the government is going to have the ability to enforce its claims and enforce property rights is troops. Which, given the difficulty of local transport, will be stationed locally, and supported by the local farmers. Not an ideal situation for someone looking for a new start.
No, but as someone suggested, there may be airships (Oh, why be coy, let me say what everybody knows anyway. Not mere airships, but ZEPPELINS!!

)
Make sure the zeps have enough fuel to travel both ways without refueling.
And while zeps are technologically feasible, the question "why bother building them?" comes to mind, from the government's point of view. After all, we don't need them locally, and most of the people are right here. Do we really get enough benefit from the small towns scattered hither and yon to be worth the cost of construction of zeps and garrisoning every small town on the planet?
I definitely don't want airships to be common. I don't want the settlers to be able to radio a taxi and zip over to Ashar City (the capital) for a visit. But I can see a few routes connecting the big cities (well, biggish cities -- there aren't really any big cities). And if any group would be able to support a (small) fleet of zeppelins, it would be the government. (It might even be able to import a few structural components to improve performance).
This "biggish" cities are probably all on the same plateau, and connected by rails.
There's a ranger-like organization called the Constabulary. There'll be a Constabulary outpost within a few hundred km, close enough to keep an occasional eye on what is going on. Not an ongoing presence, mind.
Where does the Constabulary outpost get its food? Ammo? Uniforms? Toilet paper? Staffing something in the back end of nowhere is not trivial, even with zeps to do the hauling.
Note that this question applies to anywhere the government has employees off the main plateau - which, note, is more than big enough that probably 90% of the 80% of the population that lives on the high plateaus live there.
In 1105 the bright promise of the spanking new government is one of the things that will attract the settlers. I admit that in 1120 things are looking quite a bit tarnished.
A spanking new government that thinks it owns every square foot of the planet, even otherwise empty plateaus thousands of km from the capital doesn't seem like a "bright promise" to me. More like a "banana republic in the making".
The current government is pretty recent. There hasn't been much demanding of land taxes for centuries. But there were other governments in the past, and why shouldn't the new government accept old land grants, much as some of the Spanish land grants were accepted by the US?
The heirs are paying the taxes to the new government until they unload them. Then the new guys are going to find that not only did they have to pay to settle, they have to pay every year to stay. Which changes the equations a bit when looking at viability of a colony.
Note, by the way, that the Spanish Land Grants that were recognized were the ones that had already been proved and were still occupied. Grants to places that noone lived were ignored.
This place is facing populations that much smaller too. You don't need a galleon ful of people to deal with 200 civilians.
Guess that depends on how many TL12 firearms the civilians have, doesn't it?
A TL4 population with knowledge of thousands of years of history and contact with the rest of Charted Space is not really a close analogy of any historical society on Earth. I can't see the lack of any such analogy as being evidence that it couldn't exist.
True enough. And, as I said, you're the gm, and can do as you please.
But *I* wouldn't find the prospect of settling there all that appealing under the conditions you cite.
Hell, if all I wanted to do was get away from the city into a farming town, I'd just move to Brumaire (similar population, nicer atmosphere, more usable real estate, and closer to modern amenities). Or Harcourt - thin atmosphere, but still quite breathable, more land than Forboldn, even lower population...
And in case you're wondering, I'm talking about the other two habitable moons of the gas giant Regina is orbiting...
ZEPPELINS!
Not a big fan of the things myself, the picture of the Hindenburg comes to mind whenever I hear the word. But I can understand the appeal ;-)
Also, there are a few imported grav vehicles in Ashar City. They're expensive and there aren't many of them, and all the commercial ones are booked solid for months ahead, but I think the government might well have a few. (Well... in 1105 there might well not be any grav vehicles at all yet).
Realistically, if the government felt the urge to assert its sovereignty over ever square foot of usable real estate on the planet, then YES, they'd have grav vehicles in 1105. The superior utility more than makes up for the higher price.
Though actually a sensible government, trying to do what you want them to do here, would prefer a couple-three big sub-orbital transports. That way you have FAST access in meaningful amounts to faraway plateaus.
Which leaves you with the colony not quite as "on its own" as you seem to be suggesting is the objective.
On the other hand, looking at budgets, I have a hard time coming up with enough taxes to even pay for the zeps, much less grav vehicles. Assuming a "normal" level of government services.
Note that a "normal" level of government services is problematic at best. The USA includes things like a Navy and Air Force, both of which are useless on Forboldn, and frankly an Army is only useful to assert sovereignty on plateaus far from the central government - locally, the police should be more than enough, given the tiny population.
Plus there's the whole Social Security/Medicare thing, which isn't really a meaningful burden at TL4 (lifespan will suck, so Social Security will be more like its earliest days, when it was a trivial burden, and medicine is probably unreliable and inexpensive (you can't spend too much when there's not really much a doctor can do for you))...